This is a blog by a former CEO of a large Boston hospital to share thoughts about negotiation theory and practice, leadership training and mentoring, and teaching.

Tuesday, May 03, 2011

Use that hammer on a real nail, Don

Although I spent nine years running a hospital, and over twenty years before that in the public policy realm, I still don't understand how policy is made in the health care field. Look at this article from Kaiser Health News about a new approach to Medicare payments:

Medicare took its broadest step yet in moving away from its traditional hospital payment method, finalizing a plan to alter reimbursements based on the quality of care hospitals provide and patients’ satisfaction during their stays.

The initiative is the beginning of a transition from paying hospitals on the basis of the amount of care they provide. Many health care researchers believe this fee-for-service system has encouraged unnecessary care, driving up costs and giving hospitals no incentive to economize.

Let's stop right there. Notice how we are talking about a transition from fee-to-service to some kind of capitated or bundled payment approach. As I have mentioned before, even in way-ahead Massachusetts, no one has produced data to test whether the latter approach makes any difference.

But maybe the reporter was just concatenating two unrelated topics. Here's the actual program:

Under the final rules announced Friday, Medicare will cut payments to hospitals 1 percent and set that money aside for a bonus pool. Hospitals that do better than average on a variety of measurements, or show the greatest improvement from the previous year, would earn bonus payments, totaling $850 million in the first year. The bonus pool would increase to 2 percent of Medicare payments in October 2016.

Here we go again. When you have a hammer, everything looks like a nail.

Is Medicare adopting this approach as a movement away from fee-for-service (as the reporter suggests), or is it simply an approach meant to encourage better quality? If the latter, is it the right approach? Are the dollars significant enough? Are the dollars paid to a hospital a persuasive way to encourage nurses and doctors to do things differently?

I don't know of any hospital administrator who has been successful in motivating doctors and nurses to engage in process improvements by stressing possible impacts on the hospital's bottom line. Indeed, most doctors I have talked to have said that this is the quickest way for them to become uninterested.

Look, doctors and nurses have devoted their lives to alleviating human suffering caused by disease. What is motivational are changes that permit that to be done better. The good news is that improvements in quality and safety also help reduce costs and thereby improve a hospital's bottom line. Captain Sullenberger, Brent James, Lucien Leape, and Spear-Toussaint-Kaplan and others have set forth a very clear agenda as to how to make that possible.

One factor that is missing today, though, is the ability of doctors and nurses to share best practices and learn from their colleagues in other hospitals. But the Joint Commission, which collects these best practices while charging accreditation fees to the hospitals that provide these stories, keeps this information in a locked-up library.

Open note to Dr. Berwick at CMS:

"The Joint Commission has been delegated its powers by your agency. You have given it a license to collect fees from the public. Isn't it time for you to write or call that agency and demand that the Leading Practice Library it has assembled using those fees be made widely available -- to all people in hospitals, and indeed to the public at large?

"You have this hammer, too. Why not pound on a nail that is clearly sticking up?"

4 comments:

I'm skeptical of payment rewards and punishments. A bonus for "most improved" rewards those who had the poorest results previously, a reward subsidized by those who had some of the payment withheld. How are organizations going to feel about that?

If the world were so simple as to respond simply and linearly to rewards and punishments, wouldn't we have fixed things by now? We could just threaten HUGE fines for medical errors with the expectation they would go away? If a patient gets an HAI, we will fine you one billion dollars (Dr. Evil voice).

The world is way too complicated for simple sounding solutions. Yet as the payment structure gets more complex, that creates more ways for people to game the system.

They are looking for the "magical algorithms" that will accomplish this and granted technology and reports help and make us smarter, but who's doing the interpretation? I say this as I used to write software for a hospital in California and we have lost balance with the thought that a formula is going to cure everything.

In 2013 we have the big CMS algorithm coming in for re-admissions and Mike Leavitt is one of the individuals pushing for programmers to find the mathematical solutions with hanging that 3 million dollar carrot out there, but come on, we will have information to analytize and getting smarter with but still need balance with the "human" side of care.

Kaiser has done a good job and they do a lot of hands on work with their innovation center in Oakland and I interviewed the head of that group and a couple of their doctors and they create both high tech and low tech solutions and combinations there of. I actually got a little satirical one day and made a post about data analytics becoming our next 12 step program:)

My other half for a number of years worked as a hospitalist and there's nothing worse or a bigger turn off to hear some executive sit there and say we are not making admitting quotas, and it's not supposed to be stated that way as we all know, but it happens and that doesn't excite or motivate anyone. Pay for performance works good for sales but not for every occupation by all means as in healthcare it's a bag of apples and oranges and nobody fits in those data tables the same way:)

As a consumer I get tired of it and I know doctors are tired of it as we again lack the balance here with ethics, humans and algorithms and the latter creates issues where they should not be. We come back around again to who's interpreting and making policy based strictly on numbers and that's now how some think all avenues of life are supposed to work but it's not.

This is coming from a geeky code head that's written enough such formulas over the years and I have watched some very weird and sometimes unrealistic interpretations:)

"I don't know of any hospital administrator who has been successful in motivating doctors and nurses to engage in process improvements by stressing possible impacts on the hospital's bottom line. Indeed, most doctors I have talked to have said that this is the quickest way for them to become uninterested."

I would agree that a hospital administrator who stresses cost as the primary driver will demotivate physicians and nurses. At the same time, it is possible to motivate physicians and nurses based on value. We’ve learned during our work at improving value in Cadiac Surgery that you cannot separate quality and cost. Our current model of delivery in the U.S. is not sustainable, but it takes time and cultural change to get the clinical providers to understand the need and their role for reducing cost. As we develop new disruptive models, improving quality and cost both need to be targeted. They are not mutually exclusive.

Planning to share successes of significantly reducing cost publically within the next year.

The mantra in our hospitals used to be that improving quality in itself also reduces cost. This is true in many cases. I think it is the idea that the doc is being asked to help with costs just to improve the hospital's competitive position or enable it to spend more $$ on bigger administrative offices (I've personally witnessed this) that turns off a lot of physicians. Couch it in the terms that we are hurting patients or bringing down our entire system with bloated costs, and you get more traction.

nonlocal MD (now I have to specify since there's another 'nonlocal", welcome!)